The Fiscal Council published on Tuesday an opinion on the Finance Ministry’s Autumn Macroeconomic Forecast, released on Monday. The Fiscal Council approves the forecast while making recommendations and expressing reservations about certain assumptions. According to the Council, the macroeconomic scenario for 2027-2029 is realistic and falls within an acceptable range, but some of the assumptions and the forecast for 2026 are optimistic or insufficiently justified.
The realistic range for economic growth in 2026 is between 2.5% and 2.8%, the Council said, while the Ministry’s forecast puts economic growth at 3% this year.
According to the Finance Ministry, real gross domestic product (GDP) growth is projected at 3% in 2026, 2.5% in 2027 and 2.4% in each of 2028 and 2029.
The Fiscal Council accepts the 2.8% growth forecast for 2026 and 2.5% for 2027, but expects growth to slow to 1.5% in 2028 due to cyclical cooling in the external environment. The Finance Ministry’s 3% forecast for 2026 is at the upper end of the estimates, with a realistic range of 2.5%-2.8%, and requires an acceleration in quarterly growth in the second half of the year. As of September, however, this is not supported by industrial production, retail trade and employment, the opinion says.
The average Harmonised Index of Consumer Prices (HICP) inflation in the Finance Ministry’s forecast is 4.8% in 2026 and 4% in 2027. The Fiscal Council considers the 2026 figure realistic and the 2027 projection rather cautious.
Unemployment is expected to remain around 3.4% according to the Finance Ministry forecast, which the Fiscal Council considers acceptable. Nominal GDP is internally consistent, at about EUR 130.5 billion in 2026 and EUR 141.3 billion in 2027, but the sharp decline in the GDP deflator after 2026 is not explained, the Council said.
The main risks to growth and nominal GDP include higher energy prices and interest rates, fiscal consolidation under the excessive deficit procedure, the end of the Recovery and Resilience Plan, with absorption at around 70% as of August 31, 2026, and possible cooling in lending and the housing market.
The Fiscal Council recommends that the 2026 growth forecast be better justified or slightly lowered, and that the alternative scenario accompanying the Finance Ministry’s forecast be made complete and quantitative, with the assumptions underlying fiscal policy also specified.
Regarding budget planning for 2027, the Fiscal Council recommends taking a cautious approach to revenue projections and ensuring a sufficient buffer to respond if an adverse macroeconomic scenario materializes.
Fiscal Council Says Finance Ministry’s 2026 Growth Forecast Overly Optimistic THE NEWS FROM BULGARIA – NEWS AGENCY 2009-2025 2026-09-29 10:42:56
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